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Early retirement poses challenges for Taiwan’s economy

Reporter Vivian Hsiao
Release time:2023/04/15 17:31
Last update time:2023/04/15 17:31
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TAIPEI (TVBS News) — The average age for first-time pension recipients in Taiwan has decreased in recent years, according to Bureau of Labor Insurance data. 

The average age is 61.28, with 26% of recipients between 55 and 59.

 

The president of the Taiwan Federation of Financial Unions, Chiu Yi-gan, pointed out that there's a high demand across industries for the labor force in Taiwan, but "the country's low birth rate and the increasing number of baby boomers opting for early retirement have led to a drop in labor force participation."

"While the need for additional workers is clear, meeting this demand has proven to be challenging, " he added.

Experts warn that even if Taiwan increases its retirement age to 65, it would still not be enough to cover the shortfall caused by the country's rapidly declining birth rate and the resulting gap in the labor force. 
 

This could create significant problems for Taiwan's Bureau of Labor Insurance and the nation's pension funds.

"Declining labor pensions and insurance payments lead to reduced retirement funds, which is especially worrying as senior employees tend to earn higher salaries and contribute more to the insurance fund due to their longer tenure," Chiu explained.

As Taiwan continues to move toward a super-aged society, the expenses associated with pension funds will only continue to rise, making the future even more challenging for future generations.

To address this issue, some experts suggest that Taiwan should follow in the footsteps of other countries and consider raising the retirement age to stabilize businesses and the labor force.

Taiwan Business

#Taiwan#low birth rate#labor force#early retirement#business

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